U.S. AGRICULTURAL TRADE UPDATE                               November 20, 1998
November 1998, FAU-23
            Approved by the World Agricultural Outlook Board
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U.S. AGRICULTURAL TRADE UPDATE is published monthly by the Economic 
Research Service, U.S. Department of Agriculture, Washington, DC 
20036-5831.
 
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Summary--Fiscal 1998 exports slowed more than had been expected, declining 6
percent from fiscal 1997 to $53.7 billion.  Imports, however, rose to $37
billion, a gain of more than 3 percent over 1997. September exports of $3.5
billion, fell 6 percent from August 1998 and 23 percent from September 1997.
At $2.9 billion, September 1998 imports, however, were 2 percent over August
and just over last September. The $16.7 billion export surplus for fiscal 1998
is the smallest since the $15 billion surplus in fiscal 1991.

Exports--Bulk commodity exports in fiscal 1998 dropped 14 percent to $20
billion.  Most of the decline occurred in corn exports, which fell sharply in
both volume and value. Lower prices also reduced the value of other bulk
commodity exports, principally wheat, soybeans, and cotton. 

Fiscal 1998 corn exports reached only $4.3 billion and 37.7 million tons,
declines of 30 and 19 percent, respectively. Lower prices, 
substantially reduced demand, and increased export competition all played a
role. 

Wheat export volume increased this year.  Fiscal 1998 exports reached 25.8
million tons, a gain of 5 percent over fiscal 1997.  However, stronger
competition and lower prices reduced export value 9 percent to $3.8 billion.

Exports of soybeans in fiscal 1998 fell 3 percent in quantity and 12 percent
in value to 23.3 million tons and $6.1 billion. Strong competition from South
America helped constrain U.S. exports.

U. S. cotton exports declined in both valueand volume. At 1.6 million tons,
volume slipped less than 1 percent from fiscal 1997. But lower prices pushed
value down 7 percent to $2.5 billion.

Lower exports of high-value products (HVP) in September pulled fiscal 1998 HVP
exports down to $33.7 billion, just under the $34 billion in fiscal 1997.
Hides and skins show the sharpest decline, down 20 percent for the year to
$1.4 billion, mostly a result of slowed shipments to South Korea.
However, a number of commodities showed gains. Vegetable oils, oilseed meals,
and red meats showed the largest gains.  Soybean oil led vegetable oil growth,
rising 71 percent to $882 million on greater sales to China and Hong Kong.
Soybean meal exports rose 13 percent to $1.9 billion, as the European Union
(EU) increased its purchases. Vegetable exports reached $4.2 billion, a
2-percent gain, and red meats also rose 2 percent to $4.5 billion. 

Imports--Growth of imports in fiscal 1998 was led by vegetables and fruits.
But gains also were strong in cocoa, wine, malt beverages, and red meats. At
$3.6 billion, coffee remained the largest import; but the value of coffee
imports declined in fiscal 1998, as prices fell throughout the year.

Tomatoes, potatoes, and peppers led vegetable imports, which rose 27 percent
to $2.6 billion. U.S. tomato import growth was largest from Mexico, which also
accounted for about half the growth in U.S. pepper imports. U.S. potato
imports came from Canada. Fruit imports rose slightly to $2.1 billion; cocoa
imports gained 20 percent, wine 16 percent, and malt beverages 14
percent in 1998. Beef and veal led the red meats, rising to $1.8 billion, a
13-percent gain, mostly from Canada. (Carol Whitton 202-694-5287)     

Major U.S. agricultural export destinations and import sources unchanged in
fiscal 1998-- Despite the lower exports this year to several key
markets, including Japan, the EU, South Korea, Taiwan, Hong Kong, China, and
Russia,  the same countries as in fiscal 1997 accounted for the 10 largest
U.S. agricultural export destinations. Fiscal 1998 U.S. exports to three of
the top 10, Canada, Mexico, and Egypt, increased. China dropped to eighth
largest, while Hong Kong moved up to seventh rank. 

Similarly, the 10 largest sources of U.S. agricultural imports remain the same
as in fiscal 1997. However, Colombia moved up from sixth last year to fourth
this year, pushing Indonesia and Brazil down to fifth and sixth, respectively.
New Zealand surpassed Thailand for eighth position.

Next Update: December 22, 1998
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